In Focus: Compensation under the Roads Law

With the increase in road building in Cayman in recent years, many landowners are unsure of Government’s rights to take their land and in turn their right to compensation for their loss.

In this article we set out the basis of Government’s rights in this regard and offer guidance on how the compensation due to the affected landowner can be assessed and where they can seek further professional advice on this matter.

The right to take land for use as a public road is granted to the Highway Authority under The Roads Law (Revised).

This law requires the Government to serve two notices to the landowners before first entering onto and then classifying the land as a public road.

First notice

The first notice is known as the ‘Section 3’. This notice indicates the Government’s intention to take land, or part of it, for the layout of a new road or the widening or diverting of an existing road.

The law requires the notice to be published in the Cayman Islands Gazette, published twice a week for three consecutive weeks in a daily newspaper and sent by registered post to the registered proprietor of the land at the address on the Land Register.

This notice should state Government’s intention to construct the road, the Block and Parcel numbers of the land affected and the approximate area of the land to be taken from each parcel under the road scheme. It is the Section 3 notice that gives the Highway Authority the right to enter on to the land and sets the valuation date with respect to the assessment of compensation.

Second notice

The second notice, the ‘Section 5’ is gazetted once the Highway Authority has completed the ‘prescribed composite map’ on which the road is defined, thus fixing the actual area of the land to be taken. This is usually undertaken once the actual construction of the road has been completed.

Once served with the relevant notices, an affected landowner is required to submit two forms to the Highway Authority in order to claim compensation for any loss suffered. The ‘Notice of Intent to Claim Compensation’ should be submitted within ninety days from the date of the Section 3 notice and the ‘Claim for Compensation’ should be submitted within one year of the date of the same notice.

In completing these forms the landowner must decide on whether they wish to make a one or two stage claim. A one stage claim means that compensation will be assessed entirely on the area of land stated in the Section 3 notice, whilst a two stage claim means that although an interim payment will be made based on the area stated in the Section 3 notice, full and final compensation will be made based on the final area set out in the Section 5 notice.

The amount of the compensation to be paid to the claimant under the law is assessed on six basic heads of claim, as follows:

1) Market Value of Land Taken; This is the market value of at the land taken under the road scheme, as of the date of the Section 3 notice.

2) Compensation for Loss of Crops; The value of any damage to the claimants crops or trees which were on the affected land at the time the Highways take possession.

3) Compensation for Severance; Any loss in value to the claimants remaining land holdings at the time of taking possession of the land, by reason of the severing of such land from his other land.

4) Compensation for Injurious Affection; Any damage sustained by the claimant at the time of the taking of the portion of land, by reason of the loss injuriously affecting his other property.

5) Compensation for Disturbance; Any reasonable expenses arising from the claimant being compelled to change his residence or place of business as a result of the land being taken.

Compensation For Loss Of Profits; The loss of profits from the land between the date of the Section 3 notice and the date of the Highway’s Authority actually taking possession of the land.

We have tried above to provide a brief background of the basis of compensation under The Roads Law, however calculation of compensation can be a complex matter.

Therefore anyone served with a notice under The Roads Law is advised to obtain further advice from a Chartered Valuation Surveyor, all of whom are specifically trained in the assessment of compensation for such claims.

Claimants will of course be pleased to hear that any professional fees they incur as a result of their land being taken under a road scheme can be claimed back as part of their heads of claim and so they will not suffer any out of pocket expenses for seeking such professional advice.

Simon Watson is General Manager of Deloitte Property Consulting Services. He is a Fellow of The Royal Institution of Chartered Surveyors and a member of the RICS Caribbean Steering Committee. Simon has 20 years experience in surveying, half of that experience gained in the Cayman Islands. Deloitte Property Consulting Services provide a comprehensive range of services including project and construction management, contract and financial monitoring of projects, valuations and appraisals, quantity surveying, property management and insurance claims adjusting services.